Congress preparing ground for possible fuel price hike

A petrol bunk employee fills fuel to a motorbike in Chennai. Congress on Wednesday appeared to be preparing the ground for a possible hike in fuel prices in the near future. File Photo: V. Ganesan

The Congress on Wednesday appeared to be preparing the ground for a possible hike in fuel prices in the near future with “it is inevitable” being the refrain at the party headquarters.

Faced with a flurry of questions on such a possibility shortly before a meeting of the Congress core group, spokesman Abhishek Singhvi said: “If international and domestic exigencies make a hike unavoidable, then it should be kept to the bare minimum.”

Not discussed

Meanwhile, the core group at its out-of-turn meeting — it usually meets on Fridays — did not discuss the issue, although indications all day were that this was top-most on the agenda. Union Minister for Petroleum and Natural Gas Murli Deora could apparently not make it to the meeting.

Earlier in the day, Mr. Deora said he would present the Kirit Parikh report to the core group for discussion. In anticipation of a decision, he also contacted key allies of the Congress in the United Progressive Alliance (UPA) — Railway Minister Mamata Banerjee besides Communications and Information Technology Minister A. Raja.

For the most part, the Congress view is that a fuel price hike is inevitable given the volatility in the oil market.

As for the political costs of a hike, party leaders sought to point out that prices were escalating when the last Lok Sabha elections were held. The same was the case during the Maharashtra Assembly elections. “Yet, we weathered the adverse impact of price rise,” they said.

While the Congress Working Committee had last Friday urged the Centre to take every step possible to rein in prices, there is also an acknowledgement that if the decontrol of the prices of petrol and diesel — as recommended by the Parikh Committee — was inevitable, then the earlier the better as it gave the party that much time to weather the impact.

Though the price rise issue has not harmed it politically over the past year, Congress leaders are well aware that this is partly because the Opposition — demoralised by the 2009 Lok Sabha elections — has not been able to recoup and mobilise opinion.

“But this honeymoon is not going to last forever and we have elections coming up in Bihar, Tamil Nadu, West Bengal and Kerala over the next 15 months,” they said.

For the record, Mr. Singhvi, in response to questions on a possible fuel price hike in the face of crushing inflation, said: “All inflation is anathema to the UPA government because it is most harmful to the aam aadmi [common man].”

Refusing to speculate on whether there would be a hike in fuel prices, Mr. Singhvi said that if it was inevitable, then it should be demonstratively unavoidable.